Sonu Varghese
The World Cup Is Over—and I’m Not Quite Ready to Move On
5 weeks, 48 teams, 104 games, a record-breaking 308 goals, 1 winner. Congratulations, Spain! The final was anti-climactic and, dare I say, boring, but the team that deserved to win did so. Still, it was an amazing five weeks of entertainment, and now it feels like a hangover. I yearn for more, so I’m trying …
Sonu Varghese
July 22, 2026
Three Things I’m Watching This Earnings Season
We just released our Midyear 2026 Outlook: Still Riding the Wave, raising our estimate for the S&P 500’s full-year return from 12-15% to 15-18%. This is on the back of an AI wave that continues to roll, though the water is choppier than it looked at the start of the year. While the labor market …
Sonu Varghese
July 20, 2026
The AI Wave Is Everywhere, Even in Small Caps
You would think AI is a growth story, but it’s showing up in more places than in the obvious “large cap growth” stocks. In a recent blog I noted how even so called “value” stocks have seen returns driven by the AI wave. Looking at style box returns for the first half of the year, …
Sonu Varghese
July 8, 2026
Focus on the Big Picture: The Labor Market Is OK & Households Are Spending
Every so often, the data throws a bit of a curveball at you, and that’s essentially what the June payroll report did. But that’s also a cue to take a step back and focus on the big picture. Right now, the big picture is that the labor market is in fine shape. That’s good for …
Sonu Varghese
July 2, 2026
How I’m Learning To Stop Worrying and Love the Bubble
There I said it, the word “bubble.” To be honest, I don’t know if we’re in the middle of a bubble, and certainly not when it might burst if we are. But I do believe we’ll look back on this period several years from now and recognize it as a bubble. There’s clearly something huge …
Sonu Varghese
June 24, 2026
Mixed Messages From the Fed Even as the Economy Runs Hot
There’s always some uncertainty around a new Fed chair and how they’ll handle the communication of monetary policy. But it’s usually more around style rather than substance. In Kevin Warsh’s case, the concern is substance, or lack of it. While 12 FOMC members set policy, the chair plays the central role in explaining the thinking …
Sonu Varghese
June 18, 2026
Forget The 1990s, Here’s Why This Could Be Like the Late 1960s
With the huge run-up in AI-related stocks, the obvious comparison everyone makes is to the 1990s. However, beyond the fact that we have transformational technology in the works now, akin to the internet in the 1990s, there’s not a lot else that’s common. For one thing, real GDP growth averaged 4.5% from 1996-1999, whereas it’s …
Sonu Varghese
June 12, 2026
The Labor Market is Perfectly Fine, Thank You Very Much
So much for the “AI is killing jobs” narrative, let alone “the Fed should keep rates low to protect the labor market”. We’ve been in the camp since the start of the year that the labor market looks better than a lot of economists, market bears, and even the good folks at the Federal Reserve …
Sonu Varghese
June 5, 2026
The Summer of Mega-IPOs
With the upcoming SpaceX IPO and Anthropic also filing a confidential draft S-1, IPOs are in the news, to say the least. I thought it would be interesting to look at some historical stats on IPOs, and conveniently, Professor Jay Ritter at the University of Florida maintains a comprehensive IPO data hub covering IPOs from …
Sonu Varghese
June 3, 2026
Consumer Spending Is Humming, But There’s a Catch (Actually Two)
Inflation has been a big story recently, especially after the U.S.-Iran war started. We’ve pointed out that inflation was a growing problem even prior to the war and isn’t limited to an energy shock. Yet, the energy shock and higher pump prices are how inflation has been most salient for households. There was a school …
Sonu Varghese
May 29, 2026